Factors’ Affecting the Motives of Rural Households’ Saving Behavior in North Bench District, Bench Maji Zone of Southern Ethiopia

الموضوعات :

A Gonosa ¹ , B Bargissa ² , K Tesfay ³

1 - Department of Agricultural and Resource Economics, Mekelle University, Ethiopia.
2 - Department of Rural Development and Agricultural Extension, Mekelle University, Ethiopia.
3 - Department of Rural Development and Agricultural Extension, Mekelle University, Ethiopia.

تاريخ الإرسال : 04 الأربعاء , شوال, 1441 تاريخ التأكيد : 18 الأربعاء , شوال, 1441 تاريخ الإصدار : 09 الثلاثاء , ذو القعدة, 1441

الکلمات المفتاحية: Rural Households, Factors affecting, saving behavior, North Bench District,

ملخص المقالة :

A few studies conducted in Ethiopia about rural household’s saving behavior devoting much attention to macroeconomic data. Therefore, this paper examines both motives of rural household’s saving and factors affecting their saving behavior by using micro level data sets. Primary data were obtained from structured and semi-structured questionnaire, key informants interview, field observation and focus group discussion whereas the secondary data were gathered from banks and micro-finance institutions. A multistage sampling technique was used to select the study area and178 sample respondents. The descriptive statistical tools including frequencies and percentages were used to examine motives of rural household’s saving whereas chi-square test and t-test were used to examine statistical significance between dependent and explanatory variables. In addition, binary logit model was used to analyze factors affecting rural household’s saving behavior. Results show that mitigating emergency, smoothing future consumption, high interest rate, planning to have luxury life and starting new business were reasons behind the motives of rural household’s saving whereas lack of surplus income, shortage of formal financial institutions, lack of awareness and low interest rate were discouraging factors to save in the area. Furthermore, Age, education level, access to credit and extension service, interest rate, transaction cost and livestock ownership of household heads were factors significantly influencing rural household’s saving behavior . Giving emphasis on adult education, income diversification, expanding branches of formal financial institutions, proving extension service and revising interest rate were points recommended to all concerned bodies to enhance rural households saving behavior in the study area.

المصادر:

1. Abdelkhalek Touhami, Arestoff Florence, Defreitas Mekkaoui and Mage Sabine .(2009). A Micro econometric Analysis of Households Saving Determinants in Morocco. University of Paris, France.


2. Adeyeno R and Baire As. (2005). Saving and Investment patterns of Cooperative Farmers in South Western Nigeria. Journal of Social Science, 11(3):183-192


3. Annual report of North Bench District administrative office (2019)


4. Aron Haileslassie, Nigus Abera, Getnet Baye. (2013). Assessment of Saving Culture among m Households in Ethiopia. Journal of Economics and Sustainable Development, 4 (15):1


5. Bogale Yadeta, Amsalu Bedemo and Melikamu Belina. (2017). “Determinants of Saving Behavior of Farm Households in Rural Ethiopia: The Double Hurdle Approach”.


6. Gedela Surya Prakasa .(2012). Determinants of Saving Behavior in Rural and Tribal Households: An Empirical Analysis of Visakhapatnam District, International Journal of Research in Social Sciences, 2(8).


7. Girma Teshome, Belay Kassa, Bezabih Emana, and Jema Haji. (2014). Saving patterns of rural households in East Hararghe. Journal of Development and Development Economics, 6(4):177-183.


8. Girma, T., Belay, K.; Bezabih, E. and Jema H., (2013). Determinants of Rural Household Savings in Ethiopia: The Case of East Hararghe Zone, Oromia Regional State. Journal of Economics and Sustainable Development, Vol.4, No.3, 2013


9. Gujarati, D. N. (2009). Basic econometrics, Tata McGraw-Hill Education.

10. Gujarati, DN. (2003). Basic econometrics. Fourth Edition. McGraw-Hill, New York.

11. Halefom, .Y. (2015). “Determinants of household saving in Gedeo zone, Southern Ethiopia”. Journal of Economics and Sustainable Development, 6 (7).

12. Harris Mark, Loundes Joanne and Elizabeth Webster. (1999). Determinants of Household Saving in Australia.

13. Kibet, l.K., Mutai, B. K., Ouma, S. and Owuor, G. (2009). “Determinants of household saving: Case study of smallholder farmers, entrepreneurs and teachers in rural areas of Kenya”, Journal of Development and Agricultural Economics, 1 (7), 137-143.

14. Kifle Tesfamariam. (2012a). Determinants of Saving Behavior of Cooperative Members Survey Evidence from Tigrai Region, Ethiopia. Journal of Research in Economics and International Finance, 1(5) : 150-158.

15. Kifle Tesfamariam. (2012b). Saving Behavior and Determinants of Saving Mobilization by Rural Financial Cooperators Mekelle University, Ethiopia. Journal of Agribusiness and Rural Development, 4 (26): 129-146

1. 16.  Michael, K. (2013). “Savings habit and use of savings among households in Ga-East municipality”, Dissertation submitted to the University of Ghana, Legon in partial fulfillment of the requirement for the award of a master of philosophy development studies degree.

17. Mirach, T. H. and Y. M. Hailu (2014). "Determinants of household savings in Ethiopia: A case of North Gondar

18. Nayak, S. (2013). “Determinants and pattern of saving behavior in rural households of western Odisha”, a thesis submitted for the partial fulfillment of the master degree in development studies. National Institute of Technology, India, 25-28.

19. Obayelu OA. (2012). Saving Behavior of Rural Households in Kawara State, Nigeria. African Journal of Basic Applied Science, 4(4):115-123.

20. Rha, Jong-Youn, Catherine P. Montalto, and Sherman D. Hanna. (2006). The effect of self-control mechanisms on household saving behavior. Financial Counseling and Planning 17: 3–16.

21. Sebhatu Kifle Tesfamariam .(2012) .“Saving Behavior and Determinants of Saving Mobilization by Rural Financial Co-operators in Tigray Region, Ethiopia: Journal of Agribusiness and Rural Development”.

22. Mossie and Tadele, M. (2018). “Household saving behavior in Jimma zone of Oromia Region, Ethiopia”, International Journal of Research in Commerce, It and Management, 5(3).

23. Tsega Hagos and Yemane Michael .(2014). Determinants of household saving in Ethiopia: A case of North Gondar Zone, Amhara Regional State, Ethiopia. International Journal of Development and Economic Sustainability, 2(4): 37-49.

24. Yao, R., Wang, F., Weagley, R. O., Liao, L. (2011). Household saving motives: Comparing American and Chinese consumers. Family and Consumer Sciences Research Journal, (1): 28–44.